Troubles in the U.S., particularly relating to the weak employment picture, pose a bigger threat to markets than the European debt crisis, Goldman Sachs strategist Jim O'Neill told CNBC.
Despite all the focus on weakness in Greece, Spain and elsewhere, the chairman at Goldman Sachs Asset Management said he is more concerned about elevated weekly jobless claimsas a sign that the American economy remains fragile.
"The markets are right to be concerned with these (European) issues. But just as importantly to the (Standard & Poor's 500 ) in my opinion is what's going on with weaker job claims and the growing evidence that some of the momentum in the U.S. has been lost," O'Neill told "Squawk Box." "I'm not sure that the European thing is that important to non-European markets going forward."
Weekly jobless claims for the most recent reporting period stood at 377,000 in the U.S., near the 400,000 mark that is often considered a dividing line for progress in reducing unemployment.
The government's monthly nonfarm payroll report for May showed the economy created just 69,000 jobs, while the unemployment rate rose to 8.2 percent.
Those numbers are of bigger concern than what's happening in the ailing euro zonecountries, O'Neill said.
"Europe doesn't run the world," he said.
Moreover, he said countries closer to the debt crisis — Holland and Switzerland, to name two — are "doing just fine." O'Neill attributed the depth of the euro zone impact to a lack of confidence from corporate America, one of several factors that will contribute to "continued choppiness through the summer" for the stock market.
"The second half of the year, unless Europe completely implodes, I'm still in the camp that the markets recover, particularly the U.S. and some of the big (emerging markets) and we could still conceivably see new highs," he said. "So we shouldn't get solely focused on the European stuff."